Millennial Think Tank: The Contract Employee Workforce

This week’s broadcast found us taking a deeper look at how Millennials work, in particular their experiences with contract work and at will employment.

The think tank included:

Kelsey Pollack, a middle Millennial and project manager in Palo Alto, both a contractor and manages contractors

Albert Qian, a middle Millennial working in product marketing, has extensive experience with contract work and is the founder of Albert’s List, a 3,000+ strong community for job searches / HR

Mary Ann Keeney, a young Millennial, designer at an architecture firm, and has worked as a contract employee

Hung Fam, an older Millennial, has worked as a contract employee for 6 years, and is the founder of Culture Summit

Kelly Mosgofian, an older Millennial and avid gamer currently working in the golf industry, has experience with contract work for low wage positions

Watch or listen to the entire hangout below, or join us after the jump for a recap and key insights.

We started by framing the conversation with the fact that 40% of the U.S. workforce is expected to be part time or contract employees by the year 2020, and asked each participant to describe lengths and conditions for contract work they’ve done.

Albert has typically had long term contracts — he’s worked for two companies, more recently a 10 month contract with HP, and with Cisco a 3 month rolling contract that’s nicknamed in the industry a “forever contract.”

“You’re pretty much guaranteed renewal, it’s just that they have it on a 3 month rolling basis…it’s the equivalent of working as a full time employee, except you don’t go on their permanent roll or get benefits / vacation, but you do get a higher rate.”

Hung pointed out that it’s more than just benefits that are at stake, including bonuses and other types of compensation.

Kelly, who calls himself a minimum wage slave, detailed contract work he did as a youth hockey coach. It didn’t require a lot of time per week, roughly 2 hours, but he was also paid a stipend of $50 for 3 months work which didn’t end up a very good deal for him, though he did get free ice time. Door to door sales work he’s engaged in was set up for him to work a ton of hours without any guaranteed compensation.

Mary Ann is technically a contract employee as an intern for the architecture firm she’s designing for. The term is a few months, but she’s also done freelance work that doesn’t have any type of set time length.

Kelsey, who has been a contract employee at Palo Alto University for 1 1/2 years, started on a 2 month contract that was renewed a few times and then extended into a 6 month renewable contract upon her request. She initially felt uncomfortable with it but has grown to like the situation—she doesn’t need benefits, 401k, or vacation due to her partner’s work, so she’s negotiated a higher rate which accounts for the roughly 20k extra per year that benefits would cost her.

She also felt that contract employee status made it easier for her to focus on work, and say no to work that didn’t fit explicitly into her contract…unlike a full time benefits employee.

Does contract work help / harm your career? Where does loyalty fit?

Hung noted that as an older Millennial with experience working for several tech companies in the San Francisco / Bay Area being a contract employee was less advantageous. Previously a full time employee at Sun Microsystems, when he was laid off and then sought contract work via Cisco, he didn’t realize there would be a difference in both management and how contract work is perceived. He felt that one risk is that if you do contract work constantly it can hurt your resume and cause a perception that you aren’t moving up in your career. He also had an experience with Yahoo where he was let go without any warning, his manager just cut ties.

When he moved from full time to contract, he realized his sense of loyalty and work ethic didn’t ensure anything in return from his employer. Now he’s balanced it and is productive, but aware of the need to take care of himself.

Kelsey is loyal to her employer, Palo Alto University, and feels that they treat her fairly, and likes the people she works with.

For Albert, it was easier to leave Cisco where he didn’t have as strong ties versus more recently leaving HP where he really liked and respected his teammates and management. He felt that he learned a lot from his manager and teammates, and had a lot of opportunity to improve his experience and his career overall. Part of his decision to leave for a full time job was due to changes at HP, including reductions in contract workforce, realignment of teams, and banning telecommute work. Now he receives healthcare, paid holidays, and other compensation options.

Hung is currently a contract worker, and it works well because he has a couple of startups on the side. He’s hopeful that one of those will allow him to let go of contract work, but additionally he’s interviewing for full time positions elsewhere. His belief is that in the tech industry contract work is a good way to get your foot in the door, and will allow you to work quicker and get experience. He also reiterated that he believes it’s important not to get too stuck in contract work.

Amy described her early sales experience with a carpet company / how important culture was to the employees, and asked how each panelist saw the role of culture in their experience as contract workers.

Hung felt that companies with a high percentage of contract workers were focused on getting work done and less on making sure teams got along. He felt that it wasn’t likely you would be appreciated / asked about your role, as long as you got the tasks you were assigned done.

Kelly wondered if contract work sometimes leads to less productivity, and pointed to a recent NPR episode that looked at how creativity / culture affect the way we work. He felt that sacrificing sick days, vacation time, etc. might make it more difficult.

Hung responded and gave the example of how as a contract worker you get no access to HR or any sort of career development, so you aren’t able to develop yourself…you just end up doing repetitive tasks over time and aren’t able to see very far forward.

Kelsey’s contracts have evolved over time — initially they included specifics about when and where she could work but she has now negotiated them into timing and place that makes sense for her. Mary Ann’s contract has specific / set timing, all at 32 hrs/week, and it’s all on location.

Albert’s experience in contracting is that working from home is acceptable, but rare. His boss was fairly flexible but it was expected that you mostly worked on location. Hung agreed, and noted that it’s usually up to the manager of a given team.

What responsibilities does an employer have / should they have when it comes to contract work?

The panelists were mostly unsure of where the line lies in responsibility of a full time employer—for the most part they had not thought about 401k / pension, workman’s compensation, and other types of insurance.

Hung noted that getting carpal tunnel or another type of injury was really on each person, and the rest of the panelists were fairly cynical about what responsibilities an employer should have whether full time or contract.

Kelsey felt included and welcomed by her employer even though she is a contract employer, and noted that they’d even offered to pay for an MBA program for her. For Albert, working at HP meant that he felt included by his boss and team but access to HR and other benefits were still limited. Contracting at Cisco was a bit different, and as a contract employee he couldn’t attend a holiday party and recalled his manager having to take him aside to discuss it with him.

Hung has been on 4 different teams in 6 years, and he’s found that the support from his managers is varied. One manager went out of his way to help get Hung bonuses, and develop his skills. Both he and Albert felt that in tech the opportunity to move to full time employment from contract work was rare.

Hung’s early experience with Sun Microsystems led him to want to try something different, so when he went back to work after getting laid off he chose to be in the contract world. Even now he chooses contract work knowing that there are tradeoffs because it gives him the opportunity to work on other things that he loves. He also described Culture Summit, which is an event he’s founded from start that focuses on culture across different disciplines, including engineering and design.

What will future work look like for the panelists?

Kelsey has been thinking about how she can best develop her career — and has been starting to have conversations with her employer about what’s next. She likes being a contract worker, as long as she’s aware of tradeoffs and has access to planning and legal / HR resources, something she has a bit of knowledge of and access to via her employer.

“I’ve had to learn the ropes a little bit — with the proper planning and resources, it works…how many sick days I think I’m going to take, I’m planning a 3 week trip to Patagonia and I worked that into my contract rate. We need more resources and information.”

For Mary Ann, a younger Millennial, she’s thinking about how to get into longer term contracts as opposed to completely at will employment. She’s had experiences where work suddenly disappeared, and she wants stability if not in benefits then at least in rate and length of time.

After 6 years of contract work Hung is interviewing for full time positions, but he is also focusing on his entrepreneurial ventures, on creating multiple streams of income via micro-ventures so that he doesn’t have to rely on companies that might disappear.

Albert is at his first full time job in 2 years, and he’s still getting used to the feeling. He feels less hyper-aware, and is transitioning from looking over his shoulder to feeling ok without having to constantly be ready for the next thing.

Kelly wants growth potential in any job he has, and while he’s not tied to being a full time employee he’s still skeptical of contract work in general.

Insights

There were some surprises in this episode — in particular that Millennials seem to have grown up in a world where they don’t expect companies to have any loyalty to employees.

Other takeaways:

There are a lot of different types of contracts, and they vary by industry and company

Sometimes the parameters for contract work reflect company culture but just as often they are for task based, repetitive jobs with little chance for career growth and personal development

Millennials need far more resources and expertise than are currently available when it comes to HR, legal obligations, and insurance

Life as a contract employee leads to less fear of entrepreneurship, mainly because many contractors are forced to practice it already to stay afloat

Join us next week when we’ll be talking about what responsibility imagined / less obviously defined communities have to their users.

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Joe is a product/ops guy working with the ArCompany team on content, growth, and analytics. He digs media, design, startups, data, rocanroll, anything science-y, and thinking about how to become a better human.